With Dashain approaching, beleaguered automobile dealers hopeful business will pick up

With the lifting of the lockdown, new product launches and Dashain and Tihar schemes and offers, automobile dealers have become hopeful sales will pick up with the festive season.

Krishna Prasad Dulal, president of Nepal Automobile Dealers Association (NADA), said that the sector is expecting to hit the bulk of their yearly sales target—around 40 percent—during the festival time, with hopes that this will introduce a gradual pick up in sales.

With the lockdown in place, automobile import had declined by around 60 percent in the first two months of the current fiscal year, he said. But with the lift in restriction orders, the sector is looking for a positive start, he said.

In the past few months, the sales growth of two-wheelers has risen in comparison to four-wheelers. But the highest sales has been of development and infrastructure development automobiles, he said.

Demand for four-wheelers is yet to pick up because the Covid-19 pandemic has affected customer's income and thus their buying capacity. Financing services are also not flexible currently because of months of economic standstill, and as a result it will be tough for the sector to make average business, he added.

It is estimated that it will take at least a year for the sector to revive business, he added.

Ramesh Danekhu, marketing communications manager at Morang Auto Works, the authorised distributor of Yamaha two-wheelers in Nepal, said that the two-wheeler segment has started to bounce back with new product launches and Dashain offers. The number of enquiry and footfall is high in the two-wheeler segment and sales are starting to pick up.

With people still fearful of using public vehicles with the rising number of Covid-19 cases, two-wheelers are doing good business, he said. The slow-down in economic activities has not impacted the sale of two-wheelers too much.

In terms of four-wheelers, it is still a tough time for sales despite offers and schemes. The medium-levels cars are doing good business compared to the expensive ones, he said. People thinking of buying four-wheelers are still waiting out the storm due to the coronavirus's uncertain impact on the economy, he said.

Customer inquiries in mid-sized SUV is as good as before the pandemic, especially when compared to entry-level cars and premium cars. A gradual pick up in overall business is expected if the government does not impose further lockdown or restriction order, said an automobile dealer in condition of anonymity.

Sipradi Trading, the sole distributor of Tata Motors in Nepal, said that their sales have declined by more than 50 percent in the festive season compared to past years. The NADA Auto Show, the country's biggest annual auto fair, helped boost sales every year but this year, as the auto show got postponed, the sales will not be as much as expected with Covid-19 impacting the market.

Around 3,000 automobiles used to get booked during NADA Auto Show but there is no such situation this year, said a sector insider.

The company has been receiving around 150 queries digitally for four-wheelers regularly, but only 2-3 percent of them have turned into purchases.

To boost sales, most of the auto dealers are offering cash discounts in vehicles as generally festive buyers eye on cash discounts offers and schemes rather than others, said Danekhu. “The offers and schemes have supported our sales,” he said.

Automobile dealers said that despite business not doing well they have been providing offers and schemes with a hope to boost sales.

For new model launches, automobile dealers are doing virtual product launches while following safety measures. But they say customers prefer visiting the showroom to buy vehicles rather than making the decision online and this too has affected sales.

The new models come with new prices. “The prices have increased with the arrival of the 2020 models,” said Danekhu.